Counting Cars

Auto Makers Need to Fess Up on Fleet Sales

Are auto makers pulling back on fleet sales? It's difficult to know as so few are open about the practice.

After the 2009 bankruptcy filings of General Motors and Chrysler, the Detroit Three promised to change their ways and focus on moving more of the metal at retail, only filling fleet orders at volumes proportional to retail sales.

What’s that saying about “some promises are made to be broken”?

I keep hearing whispers, and in some cases, outright shouts, that the Detroit Three are back to their old ways. And some of the import brands supposedly are traveling down the same path.

“Did you hear 80% of a Chrysler minivan’s March sales were to fleet buyers?” an executive from a competing make recently told me. “And Nissan? They're doing lots of fleet."

Too many vehicles sold to fleet customers, and too few to buyers at retail, was one of the oft-cited reasons for the Detroit Three’s woes in the early 2000s. At that time, GM, Ford and Chrysler needed to sell as many vehicles as possible at MSRP, not at hefty discounts to daily rental companies.

Problem is it’s hard to confirm fleet-sales hearsay, as auto makers rarely disclose the fleet ratio per model – heck, it’s like pulling teeth to get a fleet ratio of total brand sales sometimes – and the industry leader in fleet data, R.L. Polk, has stopped doling out such information to media.

Data the auto makers did divulge indicates April was a lower fleet month for many, the Detroit Three included.

However, if there is such a thing as good fleet (the corporate and government fleet sales auto makers love to tout), why not let the world know the fleet ratio for each model line? And why not say what percentage of that ratio was daily rental, corporate and government fleet?

Color me jaded, but when I hear 30% of April sales of the Ford Fusion, the brand-spanking new, real-deal Camry-and-Accord fighter Fusion, were to "good fleet" customers, I'm skeptical, especially because I viewed the supposed in-demand retail car at the Alamo garage in Las Vegas a few weeks ago.

Auto makers being more open about their fleet sales would go a long way toward assuaging concerns the Detroit Three turnaround is smoke and mirrors, and provide a more complete assessment of an auto maker's health to investors, from Wall Street to Main Street.

 

Discuss this Blog Entry 4

on May 9, 2013

Ah, the hazards of fleet sales: Can't live with 'em. Can't live without 'em. Great commentary, Christie.

on May 10, 2013

This blog painted with too broad a brush.

GM is VERY transparent about fleet sales because we're proud of the work our fleet team does. Every month, our U.S. sales press release breaks out our fleet as a percentage of total sales. We also break out total and retail sales by brand in a table. By default, the balance are fleet sales.

In addition, we routinely answer questions about fleet sales on our media and analyst conference call. Topics we've addressed include our commercial, rental and government mix, customer trends and fleet mix by vehicle line.

We think our consistent level of disclosure on a wide range of topics including fleet sales makes our release and call the best in the business. But don't take my word for it. Ask GM beat reporters and members of the Wall Street analyst community.

on May 10, 2013

Jim, it's great GM is open about the fleet percentage of its monthly total. However, I understand you stop short of breaking out the fleet percentage on a model-line basis. That's what I'm advocating for and what I'd like to see every auto maker put into practice.

on May 13, 2013

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What's Counting Cars?

Blogs and commentary about automotive data, industry trends, and the future of the auto industry.

Contributors

John Sousanis

John Sousanis oversees WardsAuto data operations as Director of Information Content, and is Ward’sAuto sales analyst. Follow John on Twitter @CountingCars.  

Haig Stoddard

Haig Stoddard is a veteran automotive industry analyst. His current focus is North America production and longterm sales forecasting.
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